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Bitcoin is a Ponzi

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Re: Bitcoin is a Ponzi

#661

Post by randomswede »

feanaro wrote: post #591
nuerow wrote: post #562

Earlier quoted context omitted.

> People like Bitcoin's provable global ledger and this is where the value lies. The value is not burned, it's embedded into this ledger. Aren't you just stating that Bitcoin has absolutely no intrinsic value?

What is "intrinsic"? Nothing has intrinsic value.

Gold has inherently good conductivity, extreme malleability and pretty good chemical resistance. I would call those intrinsically valuable traits.

Likewise a whole slew of physical goods, who have built-in traits due to what they are that make them (on some level) valuable.

Bitcoin only has value due to a shared hallucination.

Re: Bitcoin is a Ponzi

#662

Post by feanaro »

randomswede wrote: post #661
feanaro wrote: post #591

Earlier quoted context omitted.

What is "intrinsic"? Nothing has intrinsic value.

Gold has inherently good conductivity, extreme malleability and pretty good chemical resistance. I would call those intrinsically valuable traits. Likewise a whole slew of physical goods, who have built-in traits due to what they are that make them (on some level) valuable. Bitcoin only has value due to a shared hallucination.

Most of the value of gold is not due to those properties. Yet even for those properties, if you look close enough, it is shared hallucinations all the way down.

I think you'll also have a hard time explaining how "good conductivity" is fundamentally different from e.g. "resistance to tampering of historical records".

Re: Bitcoin is a Ponzi

#663

Post by Valakas_ »

amarant wrote: post #616
derangedHorse wrote: post #593

Earlier quoted context omitted.

A lot of people compare the Tulip craze to Bitcoin but the differences in the properties of each should make it clear why Bitcoin has a higher chance of maintaining value over time. The qualities that Bitcoin has, have typically been sought after in other high valued commodities. Things like longevity and (protocol enforced) scarcity are previously things attributed to gold and remains one of the reasons why gold con…

I agree that bitcoin has exactly one of the properties that makes gold valuable. It lacks the others though: you can actually use gold for a wide range of applications, from electrical to cosmetical, and it's rarity actually makes it even more useful as decoration, as it becomes a brag (look how much expensive gold I can afford). You can't build electrical circuits from bitcoin, nor can you wear them as a necklace(I…

I used to think like that. Except most of the value of gold comes exactly from the same mindset it puts value on BTC and not on those properties you describe.

While gold does have some interesting properties in no way would that explain a 10 trillion dollar market cap, and the price of 55 000 $/kg, sorry. It's just not that much better and rarer than other competitor materials. If comparing by properties alone, there are materials that should then be more expensive. For example Platinum is almost half of its price, and yet way rarer, and it's properties more useful.

Re: Bitcoin is a Ponzi

#664

Post by Valakas_ »

graeme wrote: post #526
scottyp21 wrote: post #480

Earlier quoted context omitted.

Many of these same arguments apply to gold. Do you think gold is (mostly) useless today? If yes, when did it stop becoming useful? Do you think it was always useless?

When you mine gold, you get gold, and gold is nice. If we could magically make 100x the gold, that would be great! Current gold investors would be sad but it would be a win for the world. Bitcoin mining produces heat, and maintains the bitcoin network. It doesn’t actually increase the supply of anything: the total number of bitcoins is arbitrary. The real value is whatever the network produces (happiness in its hodle…

Edit: Yes, you're also forgetting how cumbersome it is to transport gold, how to verify that it's real, how we live in a digital era and yet we're still being bogged down by a physical artifact to store/transport value and how if we'd have a futuristic mindset we would want something immaterial that may be future proof.

Also about the 500years thing, no i wouldn't actually trust that. Sorry to burst the bubble but gold hasn't been here that long in our hands compared to humans, and before gold we used other store of values or currencies. Many other civilizations held their value in their (then rare) tokens (see shell money, see Rai stones, (...), and all of them eventually lost all their value.

In this day and age, in 500 years i would be extremely surprised if humans, or super-humans, or human-AI hybrid, whatever, hadn't figure out how to make gold like we make a sandwich for breakfast. Gold (if still useful, and other much better materials haven't been developed by then) will be as common as Rai stones became when some cunning explorers decided to use their higher technology to transport them and make them total valueless to the tribes that used them to store value.

Gold will see it's "store of value" fate fade in not too long. It's just a matter of when. And don't get me wrong, BTC might too. I also can't imagine that in 500 years the encryption we have today won't be child's play for the future hyper-computers. But anyway, my point is that gold is nothing special in terms of store of value. We're just being bogged down right now for lack of technology, but that will come, just like it came to all the other tokens which eventually turned their value to almost 0.

Re: Bitcoin is a Ponzi

#665

Post by glenvdb »

esosac wrote: post #297
cemerick wrote: post #268

Earlier quoted context omitted.

Perfect example, thank you. Given the typical wage in Venezuela of late, someone looking to exfiltrate their "wealth" there would be looking at working weeks if not months to afford a single typical BTC transaction fee. Again, these proposed use cases are absolute fantasies.

i don't think you know what the typical wage in venezuela is. i do because i live here. you can watch this video if you want to know (it's not 3$ a month): https://www.youtube.com/watch?v=br7aSAXcPW4 say i've happened to save 1000$ and i want to leave the country and i don't want the police near the airport to take my money as they're known to do. do you think it would be an absolute fantasy for me to find some way t…

I wonder if cemerick has any more comments on "absolute fantasies"... probably not.

Re: Bitcoin is a Ponzi

#666

Post by glenvdb »

fay59 wrote: post #303
cemerick wrote: post #176

Earlier quoted context omitted.

"Bitcoin privacy" is a contradiction in terms, as has been repeatedly proven. You set up a scene of a refugee "storing their wealth in Bitcoin", but it begs the question: where are these refugees with substantial wealth they are looking to exfiltrate? Typical refugees are emigrating from locales where they were earning dollars per day. The use case of shielding hoarded wealth during a journey to a freer locale is a b…

I loathe Bitcoin, but that’s vastly wrong. As one counter-example, the Syrian civil war didn’t only displace poor people who never had anything to begin with; it displaced a lot of middle class families, made of engineers and doctors and such, who did have assets to their name but that were almost certainly incapable of taking it out of the country with them. It remains to be seen whether it would have been practical…

I'm sorry, are you saying Bitcoin is hyper-inflating? Am I getting my wires crossed or are you confusing terms?

Re: Bitcoin is a Ponzi

#668

Post by minitoar »

Kranar wrote: post #656
minitoar wrote: post #655

Earlier quoted context omitted.

That isn’t what I’ve described. I said “for a time” and you chose to interpret it as something very specific.

It is exactly what you described and my explanation focuses on a specific scenario to make it very clear why your reasoning is flawed. You can't just assert that it's possible to sell a stock in the future for the same price that you bought it for and that will magically come true, you have to observe what actually happens in reality and whether reality is consistent with your beliefs. To better familiarize yourself…

Please provide an example of a stock that has a price that behaves the way you’ve described. That paper is talking specifically about ex-dividend dates, not long term behavior.

Re: Bitcoin is a Ponzi

#669

Post by derangedHorse »

bb88 wrote: post #641
derangedHorse wrote: post #585

Earlier quoted context omitted.

>No. They instead take your money, buy coal, and burn it. Nothing is left. Yes, miners “take your money” but only a portion of every transaction as a service fee for processing your transaction. This is a payment for a service, the value of which is predicated on a service immediately provided rather than a promise for future value. Also “nothing is left” is also a false statement as most of the bitcoin/money process…

So unless you burn cash in a fire or counterfeit money, the only entity that can create and destroy money is the Federal Reserve. Everyone else can only create "value". So I can combine two widgets together to make a third widget and sell it for less than you could do it. That's "value" in a nutshell. So on an exchange balance sheet (stockmarket, coinbase, etc), dollars aren't created or destroyed, just transferred f…

> So unless you burn cash in a fire or counterfeit money, the only entity that can create and destroy money is the Federal Reserve.

I think this is generally false as a premise depending on your definition of “money”. If your definition of money is equivalent to US dollars then I guess this could be interpreted as correct, but other countries have “money” that isn’t issued by the Federal Reserve (the Federal Reserve being what we refer to as the US banking system)

> The price of AMD stock can go up and down ("value") but the total dollars created or destroyed is always zero. Same is true with BTC.

I don’t understand why you’re comparing the “value” of a stock or bitcoin with the “amount” of dollars. A fair comparison would involve the value of the US dollar, which is subject to change (take a look at the Forex market to see people capitalizing on that every day).

> The miners spend money burning energy which removes "value" from the economy as a whole

“Burning energy” is not removing value, it’s providing value by means of strengthening a proof of work blockchain. Whether that’s worth something to you is irrelevant to it being valuable to others.

> If I give you a ton of coal you can burn that for heat. But that removes the coal permanently from the world. OTOH, if I want to make a cryptocurrency with 10^86 coins and if I do that a billion times over, well, I have a limitless supply of cryptocurrency.

It seems like you’re saying scarcity implies value here. If that is what you’re implying, this arguments starts to take the form of a “straw man”. Bitcoin is not unlimited. Part of Bitcoin’s whole appeal is that there is a limited quantity of it to go around. Grouping Bitcoin with any other random cryptocurrency without that limitation will make any argument related to it a moot point.

> You might say that's exactly what credit card transactions are, (which is not incorrect) but the burn rate of Visa per transaction is much less than BTC.

I will agree that the amount of electricity to process a transaction on the Visa network is a lot lower than the energy required to run the Bitcoin infrastructure, but that energy just happens to be the price needed to pay for a decentralized proof of work blockchain. Even if you subjectively don’t believe Bitcoin is worth the value that’s spent to maintain its infrastructure, other people do and that’s reflected in the current economy.

Re: Bitcoin is a Ponzi

#670

Post by miracle2k »

nootropicat wrote: post #578
G3rn0ti wrote: post #289

In a Ponzi scheme, a fraudulent perpetrator takes your money (and the money of many others), gives some of that to early dropouts but takes the rest for himself . Ponzi schemers profit from lying to you where your money goes. With a decentralized digital asset there is no sole person or company that profits from just lying to you about where your Dollar goes in exchange for digitals. Sure, miners and exchanges make p…

The only way to make profit on bitcoin is to make someone else poorer by that amount. That's what makes it a ponzi - anything with this property that pretends to be an investment is one. Implementation details are irrelevant. >Goods and services provided by humans have no intrinsic value but become precious simply there being demand by other humans. Nonsense that's easy to disprove: try to stop eating food and start…

I agree with your definition of a scam, however:

> Telling people bitcoin has value, while being a developer (thus smart enough to know it's worthless)? Scammer.

There is little about being a programmer that qualifies you to declare Bitcoin a scam, or not a sacm. There is a set of programmers opposed to cryptocurrency that believes that their background qualifies them uniquely - that is hubris.

People don't need to understand any code to understand that Bitcoin is a spreadsheet.

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